UPDATE 1-Petrobras to buy more Bolivia gas for power as water levels fall

Redacción de Reuters

3 MIN. DE LECTURA

* Brazil power-dam levels at lowest for Feb since 2001

* Petrobras may extend 20-day gas contract, YPFB says

* Contract to increase Bolivia imports by up to 9.3 pct (Adds Petrobras declined to comment in paragraph 7)

LA PAZ, Feb 12 (Reuters) - Brazilian state-run oil company Petroleo Brasileiro SA will increase imports of natural gas from Bolivia to generate electricity as water levels in Brazil’s hydrodams fall to record lows, Bolivia’s state-oil company said on Wednesday.

Yacimentos Petroliferas Fiscales Bolivianos, or YPFB, agreed to sell an additional 2.24 million cubic meters (79.1 million cubic feet) a day of natural gas to Petrobras, as the Brazilian oil company is known, for 20 days.

The 20-day contract may be extended, YPFB media office said, citing sales director Mauricio Marañón. The amount is between 7.4 percent and 9.3 percent of the 24.1 to 30.1 million cubic meters a day Petrobras has contracted to buy for 20 years using the 3,150-km (1,960-mile) Bolivia-Brazil Pipeline. The main accord expires in 2018.

The additional gas is being purchased as water levels in Brazil’s southeast and central-west regions are at 36.7 percent, their lowest February level since 2001, when Brazil faced power rationing. The regions contain Brazil’s most populous cities, principal manufacturing industries and the bulk of its farms.

The low water levels, combined with power line problems that caused a blackout over much of Brazil last week, have led Brazilian President Dilma Rousseff to declare that everything will be done to make sure electricity supplies are not interrupted.

Petrobras declined to comment in a note from the company’s Rio de Janeiro press office. The plant can generate enough electricity for a Brazilian city of 1.13 million people.

Bolivia, for its part, has been looking for ways to export more natural gas to Brazil because plans to increase exports to Argentina by building new pipelines have not moved forward. A 131-year-old border dispute with Chile has made Bolivia unwilling to accept Chile’s offer to buy its gas.

Brazil gets about 68 percent of its electricity from hydropower and uses thermal power, primarily natural gas, biomass and diesel oil, to make up most of the rest. Thermal power also supplements hydrodams in dry seasons or times of drought.

Brazilian natural gas demand rose 17.8 per cent in 2013 to 67.2 million cubic meters per day, according to the Abegas, Brazil’s natural gas distributors association. Imports jumped to 47 million cubic meters per day.

In 2013, Brazil received about 60 percent of its natural gas imports from Bolivia, but paid less than half for Bolivian gas by pipeline than it did for imports of liquefied natural gas (LNG). (Reporting by Daniel Ramos; Additional reporting and writing by Jeb Blount in Rio de Janeiro; Editing by Mohammad Zargham)